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ACORN’s response to the Federal Fall Economic Statement 2023 – Help for Builders, Not Enough for renters. - ACORN Canada

ACORN’s response to the Federal Fall Economic Statement 2023 – Help for Builders, Not Enough for renters.

Posted November 21, 2023

ACORN’s response to the Federal Fall Economic Statement 2023
Help for Builders, Not Enough for renters.

(Toronto, Ontario). Today, the federal government announced its Fall Economic Statement 2023. The economic plan moves forward supporting some investment in co-ops and regulating short term rentals but still missing many needed affordability criteria on much of the market supply focused housing investments. Further, there is no new relief for grocery gouging and lowering bank fees are still eagerly awaited!

1. Housing
The number of renters has doubled between 2011 and 2021 certain communities that are more vulnerable than others, something that the government admits. However, very few measures today will help renters in core housing need, living in unaffordable housing.

  • The increase in CMHC’s annual limit of support for low- cost financing by $20 billion per year for funding mortgages on multi- unit rental projects insured by CMHC only means giving more free money to corporate developers to “help” them build more and more unaffordable rentals. Research has shown that the current CMHC financing plans such as the Rental Construction Financing Initiative have failed to create rental housing for people in greatest need.
  • The government announced a GST rebate for developers to build purpose-built rentals, student housing and seniors’ residences. This now also includes co-ops which is a positive step but any support to developers needs to be tied to certain affordability conditions so that the houses that are built are affordable.
  • There is no update on the commitment the government made to revisit the tax exemptions that are given to Real Estate investment Trusts, public money needs to support housing for those in core housing need!
  • Similarly, there is no update on the commitment to prevent renovictions.
  • The $1 billion funding for the Affordable Housing Fund which is a continuation of the existing program formerly called the National Housing Co-Investment Fund is positive and will help build affordable rentals.
  • With regard to the Federal Lands Initiative, a $200 million program which built some affordable housing, the government announced upping the minimum affordable housing target from 20 to 30%. This is helpful; however, it is critical that the homes remain affordable for perpetuity.
  • Creation of the Housing and Infrastructure Ministry is a positive initiative which can go a long way in ensuring that affordable housing is built near transit. But to make this happen, there will need to be non-negotiable terms between the government/transit agency and the developers so that the affordable housing gets built and any increase in land value doesn’t displace the existing community!
  • A suite of measures to disincentivise short term rentals that are reducing the supply of housing in cities and a $50 million fund over 3 years for cities to support their work are encouraging steps that will make available some housing supply.
  • There is no news on the acquisition fund which would have helped a great deal in enabling non-profits, co-ops, land trusts and tenants to acquire housing that comes on sale.
  • Lastly, the government emphasises the role of the Canada Infrastructure Bank (CIB). ACORN’s work shows that CIB is financing REITs such as Avenue Living that are raising the rents by as much as $500 per month.

ACORN’s Housing Demands

    • Any public money given to private developers is used to create housing for people who are in core housing need.
    • Create a fund so that co-ops, non-profits, land trust organizations, and tenants can acquire at-risk apartment buildings on sale.
    • Stop financialized landlords from buying more affordable housing. Set limits to how much housing they can acquire.
    •  Regulate banks, CMHC and public pension funds to stop financing corporate landlords who purchase with the intent to increase rents and displace people.
    • Mandate disclosure of property ownership across all provinces.
    • Mandate rent control in all provinces to disincentivize landlords from evicting long-term tenants and help maintain the units.
    • Immediately plug the tax loophole in the Income Tax Act that gives massive tax exemptions to Real Estate Investment Trusts (REITs) or require them to convert 20% of each building to social housing to ensure public dollars or tax incentives go to tenants who need it the most.
    • Fund social housing to ensure that low-income people have access to affordable homes.

2. Clamping down on junk fees such as the NSF Fees
Prior to the Fall Economic Statement, the government announced that it will be lowering the NSF Fees as these are a penalty for lower-income people. However, there is no announcement today regarding how much it will be lowered and when.

Low-cost or no-fee accounts will be helpful for low-income Canadians and the progress on this needs to be fast.

Further, there is no measure to enable low-cost credit options for people who are unbanked or underbanked.

ACORN’s Fair Banking demands

  • Lower the criminal rate of interest from 60 to 20% plus Bank of Canada rate or 30% whichever is lower. Maximum rate should include all associated lending costs: fines, fees, penalties, insurance, or any related cost.
  • Make enforcing violations accessible to borrowers.
  • Create a federally funded Fair Credit Benefit so that all low-income people have access to low-cost credit options in case of emergency.
  • Support fair lending alternatives like postal banking in all cities.
  • Lower the NSF fee from $45-50 to $10.

3. Groceries
People are struggling to buy groceries; food inflation still remains high. A recent Competition Bureau report shows that there is very little competition in Canada when it comes to grocery companies as there remain three big grocery chains that control the grocery retail in the country. Moreover, these chains have made record profits in times of high inflation by raising their profit margins.

The changes announced today to give more power to the Competition Bureau will help in the future but low-income Canadians need help now. For immediate support, continuation of grocery rebate would have helped people struggling to put food on the table.

ACORN’s demands
Tax the rich! Canada needs a windfall tax on all major corporations including grocery chains, telecom and natural gas companies.